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College Finance 101
August is here, and back to school is just around the corner!
You’re likely already gearing up for your first days back on campus or even already cracking open your books and syllabus (you good student, you!).
With the rising cost of college (and everything else) in the US, budgeting for your expenses can feel like a moving target. What needs to take priority in your college budget? Should you get a job as a student? How do you save money while still in college?
The good news is, I was once a college student just like you, and I’ve gathered a few tips and tricks to help you crush your financial goals without killing your GPA.
Create a budget, even if it’s small
Yes, this is the most frequent financial advice for just about everyone. Don’t roll your eyes, yet–– you’d be shocked at how many college students I talk to who have no idea how to budget.
When you’re in college, your expenses will likely be a little more streamlined than others. Use this to your advantage! It might also take you some time to figure out exactly how much you’ll need month to month. Don’t get too caught up in getting it perfect right away. A good budget should feel like freedom, not chaos.
To help you get started on creating that first budget, here are some categories you may want to account for:
Rent (include any and all dorm fees like laundry)
Utilities (cable, internet, water, etc)
Health-related & wellness costs (if you aren’t on your parent’s insurance)
Going out/fun money (dinners with friends, weekend trips, concerts, etc)
School supplies (textbooks and course materials included!)
Savings (yes, you should be saving, even if it’s $20 a month)
You don’t need to overcomplicate things by breaking them down too far. For example, if you go to the grocery store and grab both food and maybe a new notebook, it’s OK to include that in your grocery budget and not worry too much about trying to separate it out.
A great way to start with budgeting is to figure out your fixed expenses (aka, the amounts that don’t change month to month). This includes your rent, tuition, dining passes, gym memberships, etc. Once you have these set in place, see how much you have left and delegate your money accordingly into your other categories.
Each month, you should be sitting down with your budget and a printout of your bank statements for your Money Date (I take you through exactly what you need for your money date on episode three of the Financial Feminist Podcast). Your Money Date will help you adjust your budget as you grow. I still go on a money date with myself, and it’s one of the most important half hours of my month.
I’ve created a free budgeting template for college students to help you get started!
If you want to go really in-depth on budgeting, including learning about my preferred system, I go over that and so much more in my book, Financial Feminist: Overcome the Patriarchy’s Bullsh*t to Master Your Money and Build a Life You Love.
Emergency Fund: How much is right?
One of your primary financial priorities is getting an emergency fund in place. Ideally, you’d have this saved before the semester starts, but it’s never too late to start working on this financial necessity.
An emergency fund is exactly what it sounds like–– a fund created for emergency use only. I recommend saving three to six months’ worth of expenses in your emergency fund to start. So if each month you need $1000 to cover basic expenses, your emergency fund would be between $3000-$6000.
Don’t just leave this money in your regular bank savings account–– put it in an HYSA (High Yield Savings Account). Why an HYSA?
An HYSA usually offers 50x the interest rate of a traditional bank savings account. This helps you keep up with inflation and allows your money to grow as it waits to be used. Plus, keeping your savings in a separate account might make you less inclined to dip into it for non-emergencies.
Full-time job vs. side hustle
If you have the opportunity to work while you’re in school, I HIGHLY suggest you take advantage of it. Regardless of full-time, part-time, or side hustle, you’ll gain incredible skills and knowledge that you can take straight to the job market once you graduate. Who knows, your side hustle may even become your full-time business!
Getting connected with a job can be as simple as visiting your student career center and asking about on-campus gigs. These are usually great for students as they are more likely to work around your class schedule. You’ll find everything from RA jobs (which sometimes comes with free rent–– score!) to creative gigs like writing or photography. Big into fitness? See if your rec center is hiring! A strong swimmer? Your campus might have an aquatic center in need of a lifeguard.
For all of you budding entrepreneurs, a side hustle that can ebb and flow with your class load might be a better option. There are HUNDREDS of ways to make side-hustle money, including:
Dog walking/pet sitting
Writing for blogs
Delivery drivers or rideshare
Teaching a fitness class
Selling clothes on apps like Poshmark
Sell your art or design work on Etsy
Freelance VA or Social Media Manager
Some of the jobs above will need a little more expertise than others–– start with where your passions intersect your knowledge and go from there.
Read more: The Best Side Hustle for College Students
Avoid consumer debt as much as possible
I am not anti-credit card, but I am anti-spending without a plan. I think it’s an excellent idea for students to start early with building their credit (see my student credit card recommendations), but not without clear-cut boundaries in place. I have three simple rules for credit card use:
One: Take advantage of student credit cards first with lower limits and grow as you become more comfortable with your spending and budget.
Two: Never spend more than you can afford to pay in cash. That means that this card does not get used for emergencies or with the idea that you’re pre-paying for something you couldn’t afford in cash the same day.
Three: Pay off your FULL balance every single month. If you’re accruing interest, you’re only digging yourself into a hole–– and it gets harder and harder to climb out of the longer interest accrues.
This is where knowing your budget is so important, and if you play things right, you’ll be graduating with a killer credit score.
Listen to my episode on all things credit card and credit score from the Financial Feminist podcast.
2nd hand stores may surprise you
Fortunately (or unfortunately, in the case of low-rise jeans), the fashion of the early 2000s is coming back around. With the resurgence of “vintage” fashion and a return to basics, thrift stores, and other second-hand shops are now gold mines for clothing and accessories that look just as hip as what you’d buy at the mall. Sustainable fashion choices + saving money? Yes, please.
I’ve found so many gems at second-hand shops, from bags to home decor. If you’re really savvy and know your fashion brands or rock at DIY restoration, you can also flip clothing and furniture on Facebook marketplace (also a great place to buy second-hand!) for extra cash.
College is a unique time in life. You’ve got one foot in the “adulting” world and one foot still in school. Take advantage of these years to build the financial foundation you’ll need to thrive post-grad.